The Lord Mayor of London has made an urgent plea for the banking industry to be made a key part of City reform, warning that simply "shoving rules down people’s throats" will doom it to failure.

Ahead of the annual Mansion House dinner, Alan Yarrow told The Independent: "If someone spends their time just shoving rules down people’s throats no one will go with the spirit of it.

"What is critical about this is that it is made not just about a regulator coming down from on high and dumping regulation without any consideration about what has been happening to the market. The regulator is always behind the curve. So you need to have management properly engaged, knowing fair and clean markets are what we need to maintain in everybody’s interests.”

The conclusions of the Fair and Effective Markets Review are due to be unveiled this week, coinciding with the Mansion House dinner. The review was set up in the wake of Libor and foreign exchange rate rigging scandals.

Designed to assess the way wholesale financial markets operate and to “help to restore trust in those markets in the wake of a number of recent high-profile abuses,” it has been able to call on an independent panel of practitioners.

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Mr Yarrow said he accepted that the City had to “earn” the right to be fully brought in from the cold. A man who has run trading desks around the world during a 37-year career as a financier with Dresdner Kleinwort in the highly regulated equity markets, he said he was “mesmerised” by what has been happening in the City’s unregulated so-called “dark corners”.

“It was just like the Wild West. Equity turnover is something like – and I’m guessing here – 18 per cent? Which means that 82 per cent of the turnover, fixed income securities, currencies and commodities (FICC), in the City was unregulated.

“It’s like a supermarket without a camera, but if you take something off the shelf it’s still theft if you don’t pay for it. I’ve got no doubt that people behaved incredibly badly. That bad behaviour? It sits squarely on the shoulders of management. The problem is some of the mistakes were made at quite senior levels. If people don’t take the rap at senior levels it’s quite difficult to get people to take it lower down.”

But he added: “I want to hear about a Fair and Effective Markets Review done not only with consultation from the industry – which I think has been done – but with support for the changes they are recommending, which I expect to hear more about this week. I would like to see that there is full agreement with the companies involved to what changes take place; in other words, they have been party to the decisions. We have suffered from a distancing of the practitioner from the regulator.

“Our City is a very important economic engine, and it is vital to the future of this country. We need to get people in the same room to get a sensible, pragmatic approach so the regulator is up to speed with what’s happening next in the City. This is in everyone’s interests.”